This seminar examined developments in the concept of progress and in models of capitalism in light of the profound economic and social changes wrought by the financial and economic crisis. Attention was focused during the seminar discussion on the need – in order to respond to the new challenges – to: implement appropriate programs aimed at reducing social inequalities and fostering social integration, based also on forms of solidarity; adopt effective national and international rules to prevent the outbreak of further systemic crises; and devise innovative economic and social development projects.
It was observed that in many countries, the welfare state was established to redefine the resource distribution rules implicit in a market economy and thus to define the social norms that, in a given society, govern the appropriation of resources by individuals. Today, there is a need for a more cohesive society which protects different cultural identities and for a new social safety net. However, this objective can only be achieved if political leaders demonstrate they are capable of effectively regulating the market’s ability to change and adapt as underlying social trends evolve – starting with technological and demographic trends.
The participants also noted that the market is an institution which, as such, needs to be constantly maintained, both at the national and international level. Indeed, crises are essentially symptomatic of the inadequacy of the very institutional set-up intended to remove market imperfections. The search for new international rules to govern financial markets is still in progress. International and supranational organizations such as the International Monetary Fund and the Financial Stability Board are taking on important new responsibilities, whilst the OECD is leading the initiative to formulate a Global Standard for business conduct. Shared standards are also being developed at the supranational level in relation to the bonuses and salaries of top executives, also with a view to avoiding unfair competitive advantages between national economic and financial systems. For their part, at the national level, states can do much to improve the quality of the regulation and effectiveness of public oversight, such as by giving “teeth” again to the control and enforcement powers of independent competition watchdogs. The revelation of serious market failures also undoubtedly calls for a return to traditional “command and control” mechanisms, whilst not overlooking the role that appropriate market-based incentive techniques can play in stimulating innovation.
Finally, the participants concluded that a new economic paradigm needs to be developed which is capable of replacing the ideal of growth with one of balance and quality, with an approach that – rather than being based on the quantitative accumulation of goods – is underpinned by an economic rationale of continuous improvement of production processes and of the goods and services consumed by citizens, both in traditional industries and in new sectors such as the environment, culture, personal services and welfare.